There are several advantages to borrowing money to finance your business:
There are several important factors to consider in terms of the possible detrimental consequences of taking out a business loan, especially if your business is not growing as fast as you had hoped:
You may decide that a loan may not be right for financing your business, and that having others invest in your business is a better method. There are a few advantages to raising money through investors:
There are some downsides to equity investment for raising money for you business:
The general rule is that if you have a start-up business, you are better off financing it through equity investments since you will usually only have to pay back your investors if your business makes a profit. However, if your business already makes enough money to allow for a regular repayment schedule, loans may be better for you. You may want to get the advice of a tax attorney as well. Your tax attorney can let you know what the tax implications are for either type of financing method, and let you know which may be most beneficial for saving on taxes.
Last Modified: 06-02-2014 12:40 PM PDTLaw Library Disclaimer
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